Customers pay on time when the terms were agreed before the work, the invoice is right the first time, and reminders arrive on a schedule whether or not you are short of cash. A lot of the delay on a typical late invoice happens on the seller's side, before the customer has done anything wrong, and you can fix that part without a single awkward email.
Here is one invoice followed from the contract to the bank, with the days it lost and what would have saved them.
The invoice
A startup with €150,000 in the bank and a net burn of €25,000 a month (six months of runway) sells a €24,000 implementation project to a mid-size customer, on 30-day terms.
What actually happened:
| Day | What happened | Days lost |
|---|---|---|
| 0 | Work delivered | |
| 9 | Invoice sent, after the founder got round to it | 9 |
| 16 | Customer's accounts team rejects it: no purchase order number | 7 |
| 18 | Corrected invoice sent; the 30 days restart from here | 2 |
| 48 | Due date passes. Nobody notices for a week | |
| 55 | First "just checking in" email | 7 |
| 67 | Paid |
The customer paid 67 days after delivery on terms that said 30. Only the last 19 days were the customer being late. The first 18 were the seller's.
For six weeks, €24,000 that the founder had mentally banked was not in the account. At a €25,000 burn, that is almost a month of runway sitting in someone else's approval queue.
Before the work: agree the terms once
Put the payment terms in the proposal or contract as well as on the invoice: the due date, what interest applies if it is late, and that work pauses if payment stops. A customer who signs "30 days, then work pauses" has had the awkward conversation already, at the moment it was easiest.
Ask for part of the fee up front on project work. With 40% on signature, €9,600 of this invoice would have been in the bank before the work started, and the late part would have been €14,400.
Ask the customer's accounts team one question before you invoice: what does an invoice need to be approved first time? Purchase order numbers, the exact legal entity, a named approver. Those seven days lost to a rejected invoice were avoidable with one email in advance.
Day 0: invoice the day you deliver
The clock usually starts from the invoice, not the delivery. Under the EU Late Payment Directive, when a contract sets no date, payment is due 30 calendar days after the customer receives the invoice (Directive 2011/7/EU, Article 3). UK law works the same way when no date is agreed (GOV.UK, when a payment becomes late). Every day between delivering and invoicing is a day of credit you gave away. In the example, invoicing on day 0 alone would have moved the due date nine days earlier.
The reminder schedule
Decide the schedule once and let it run whatever your mood or bank balance:
| When | What you send |
|---|---|
| 3 days before the due date | A friendly note with the invoice attached again |
| On the due date | A short reminder with the payment details at the top |
| 7 days late | A direct note stating the interest now accruing, in euros |
| 14 days late | Work pauses, as the contract says |
A fixed schedule teaches the customer's accounts team that your invoices do not slide, and that is the reputation you want in their queue.
What the law gives you when it is late
In the EU, a business customer who pays late owes statutory interest of at least the European Central Bank's reference rate plus eight percentage points, plus a fixed €40 for recovery costs, without any reminder needed (Directive 2011/7/EU, Articles 2 and 6). The reference rate for the second half of a year is the one in force on 1 July. On 1 July 2026 the ECB's main refinancing rate was 2.40% (ECB key interest rates), so the floor for late invoices in the second half of 2026 is 10.40% a year. Member states write the directive into their own law, so check your country's version.
For this invoice, 19 days late:
interest = amount x annual rate x days late / 365
= 24,000 x 0.104 x 19 / 365
= 129.93 euros, plus the fixed 40 euros
In the UK, statutory interest is 8% plus the Bank of England base rate, and you can add a fixed £40, £70 or £100 depending on the size of the debt (GOV.UK, charging interest). With the base rate at 3.75% (Bank of England), that is 11.75% a year.
About €170 will not change your runway. Naming it in the 7-day reminder changes how fast the invoice moves, because it tells the accounts team that yours is the one that costs money to leave at the bottom of the pile. The late payment interest calculator gives you the figure per day and to date.
The mistake: counting it before it lands
The founder in the example treated the €24,000 as received on the day the invoice went out. Their runway looked like seven months while the cash in the bank said six, and a hiring decision was made in that gap. Put an expected payment date on every open invoice, and only count the money as cash when it arrives.
In Plainhub, each customer carries an expected payment date. When the date passes without the payment being marked as received, the row turns red, shows how many days late it is, and an alert names the amount outstanding. A signed customer who has not paid yet stays out of live MRR, so a late payment never inflates your runway. Once the money lands, you mark it paid and the next payment date moves on.
If you are still choosing what terms to offer in the first place, what net 30 means works through what 30, 60 or end-of-month terms cost you in cash.